Final Results

About this update from Distribution Finance Capital Holdings Plc

[{"type":"text","content":"\n \n This announcement contains inside information as stipulated under the UK version of the Market Abuse Regulation (EU no. 596/2014) as it forms part of UK law by virtue of the European Union (Withdrawal) Act 2018 (as amended from time to time). \n   \n 23 March 2026 \n \n Distribution Finance Capital Holdings plc \n (\"DF Capital\" or the \"Company\" together with its subsidiaries the \"Group\") \n   \n Full year audited results for the 12 months ended 31 December 2025 \n Another year of significant growth and strategic momentum \n Full year results exceed market expectations \n   \n   \n Distribution Finance Capital Holdings plc, a specialist bank providing financial solutions that support manufacturers, dealers and distributors across the UK, is pleased to announce its audited results for the 12 months ended 31 December 2025. \n   \n Full-year financial performance   \n   \n \n \n \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n Change \n \n \n \n \n Performance \n \n \n \n \n \n \n \n \n \n \n \n \n \n Deposit book (£m) \n \n \n 841 \n \n \n 650 \n \n \n 29% \n \n \n \n \n Loan book (£m) \n \n \n 846 \n \n \n 666 \n \n \n 27% \n \n \n \n \n New loans advanced to customers (£m) \n \n \n 1,828 \n \n \n 1,440 \n \n \n 27% \n \n \n \n \n Financial \n \n \n \n \n \n \n \n \n \n \n \n \n \n Gross revenue (£m) \n \n \n 90.9 \n \n \n 76.7 \n \n \n 19% \n \n \n \n \n Net income (£m) \n \n \n 56.0 \n \n \n 45.5 \n \n \n 23% \n \n \n \n \n Net interest margin (%) \n \n \n 8.0 \n \n \n 7.9 \n \n \n +10bps \n \n \n \n \n Adjusted cost of risk 1 (bps) \n \n \n 59 \n \n \n 75 \n \n \n -16bps \n \n \n \n \n Cost to income ratio (%) \n \n \n 57 \n \n \n 59 \n \n \n -2pts \n \n \n \n \n Adjusted profit before tax 1 (£m) \n \n \n 18.1 \n \n \n 14.4 \n \n \n 26% \n \n \n \n \n CET1 ratio (%) \n \n \n 18.0 \n \n \n 21.6 \n \n \n -3.6pts \n \n \n \n \n Adjusted earnings per share 1 (pence) \n \n \n 8.3 \n \n \n 5.9 \n \n \n +2.4p \n \n \n \n \n Adjusted return on tangible equity 1 (%) \n \n \n 11.9 \n \n \n 9.9 \n \n \n 20% \n \n \n \n \n Tangible net asset value per share (pence) \n \n \n 75.9 \n \n \n 63.8 \n \n \n +12.1p \n \n \n \n \n   \n   \n \n \n \n \n § \n \n \n New Loans Advanced to Customers up 27% to £1.83bn (FY24: £1.44bn) driving a record closing loan book of £846m up 27%. This included first contribution from our new asset finance product DFRNT of £15m. This new product addresses a market several times larger than our core inventory finance product \n \n \n \n \n § \n \n \n Record number of borrowers, up c.14% to 1,522 (2024: 1,334), with 109 manufacturer partners (2024: 88). \n \n \n \n \n § \n \n \n Adjusted profit before tax 1 up 26% to £18.1m (December 2024: adjusted PBT £14.4m) driven by increasing net income and strong cost control with cost to income ratio falling to 57% (FY24: 59%). \n \n \n \n \n § \n \n \n Continued strength in arrears management resulted in a low cost of risk of 0.59% (December 2024 adjusted 1 : 0.75%), demonstrated by arrears balances (1+ day past due and including legal recoveries) remaining low at 0.85% of total loan book. \n \n \n \n \n \n \n \n \n \n \n \n \n   \n Operational highlights \n   \n \n \n \n \n § \n \n \n Track record: The Group celebrated its fifth year as a bank in September 2025 and now has completed its fourth year of profitability, underpinned by year-on-year scaling of its lending franchise. \n \n \n \n \n § \n \n \n Product & business development : Following receipt of consumer lending approvals from the Financial Conduct Authority, the Group launched its \"DFRNT\" asset finance product, a digital first proposition providing a uniquely DF Capital customer experience. Initially built to support existing motorhome and caravan dealers, the proposition was broadened to include other known assets across industrial, marine and specialist automotive sectors. This is expected to fuel the Group's growth and is an important step in delivery of its 2030 medium term targets. \n \n \n \n \n § \n \n \n Customer experience & satisfaction: Annual lending customer satisfaction survey results showing a net promotor score of +59, up 21pts on prior year (FY2024: +38), reflecting the Group's commitment to long-term customer relationships and service quality. \n \n \n \n \n § \n \n \n The Group's retail savings proposition was awarded feefo's Platinum Trusted Service award for the third consecutive year and averaging 4.8 stars from direct customer reviews. \n \n \n \n \n § \n \n \n People & culture: Sunday Times 'Best Places to Work' engagement survey was completed, receiving 'excellent' ratings, the highest available, across all of the survey's employee satisfaction and engagement categories. \n \n \n \n \n § \n \n \n Infrastructure & growth: Relocated to new, expanded Manchester headquarters, investing in capacity to support the next phase of the Group's growth. \n \n \n \n \n   \n Medium-term Targets \n   \n The Group reaffirms its confidence in the previously announced medium-term strategic outlook.  Alongside its targets for financial year 2028, which still stand and the Company remains on track to deliver, the Group recently announced its targets for the financial year ended 31 December 2030: \n   \n \n \n \n \n § \n \n \n Loan book in excess of £1.5bn \n \n \n \n \n § \n \n \n Cost to income ratio in the range of 45%-48% \n \n \n \n \n § \n \n \n Return on required equity 2 of c.20% \n \n \n \n \n   \n The Group expects to fund this growth target predominantly through organic capital generation via retained earnings. Combined with continued utilisation of the British Business Bank ENABLE guarantee scheme and further drawdown of Tier 2 capital, the Group has sufficient capital headroom to support its strategic ambitions without the need for a dilutive capital raise, expecting to grow tangible net assets by 10-15% per annum. \n   \n This strong capital position also allows the Group to consider incremental strategic opportunities as they arise as well as returns of capital to shareholders by way of share buybacks or dividends. Subject to regulatory approval at the appropriate time, the Board expects to initiate its first dividend following the year ending 31 December 2028. \n   \n Carl D'Ammassa, Chief Executive Officer, commented: \"I'm proud of these outstanding results, undoubtedly our best year so far. We have delivered on our financial targets, exceeding expectations in almost all areas, launched new products and services, continued to invest in technology and delivered record breaking results. We've launched our new asset finance product through our \"DFRNT\" brand, built from the ground up to provide customers with a first-class digital experience. Momentum will build in this new area through 2026 as we tap into annual sales of over £10bn across our existing manufacturer and dealer base. \n   \n \"The market opportunities ahead of us as a multi-product lender, whilst always being committed to the niche segments in which we operate, are significant. We have all the tools in our armoury to deliver on our ambitious medium-term objectives through to 2030, building on these exceptional 2025 results. The foundations are all in place and I'm excited for the Group's future prospects.\" \n   \n (1) Adjusted metrics reflect a one-off VAT recovery in FY25 relating to prior periods and FY24 reallocates a one-off impairment recovery \n (2) Profit after tax divided by average equity requirement \n   \n An overview video of the results by CEO Carl D'Ammassa is available to watch here :   https://bit.ly/DFCH_FY2025_Overview and on the Company's website:  https://www.dfcapital-investors.com/ \n   \n Analyst presentation \n   \n The Company will host an analyst webinar relating to the results at 9am today. Analysts wishing to join can register by emailing [email protected]. \n   \n Investor presentation \n   \n The Company will also provide a presentation to existing and potential shareholders via the Investor Meet Company platform at 2.30pm today. Investors can register for the webinar here:  https://www.investormeetcompany.com/distribution-finance-capital-holdings-plc/register-investor \n   \n A recording of the presentation will be made available on the Company's website following the conclusion of the investor presentation. \n   \n The person responsible for arranging the release of this announcement on behalf of the Company is Karen D'Souza (Company Secretary). \n   \n For further information contact: \n   \n \n \n \n \n  Distribution Finance Capital Holdings plc \n \n \n   \n \n \n \n \n  Carl D'Ammassa - Chief Executive Officer \n \n \n +44 (0) 161 413 3391 \n \n \n \n \n  Sameera Khaliq - Chief Financial Officer \n  Kam Bansil - Head of Investor Relations \n \n \n +44 (0) 161 413 3391 \n +44 (0) 7779 229508 \n \n \n \n \n  http://www.dfcapital-investors.com \n \n \n   \n \n \n \n \n   \n \n \n   \n \n \n \n \n  Panmure Liberum Limited (Nomad and Broker) \n \n \n +44 (0) 203 100 2000 \n \n \n \n \n  Chris Clarke \n \n \n   \n \n \n \n \n  William King              \n \n \n   \n \n \n \n \n  Gaya Bhatt   \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n \n \n  Alma Strategic Communications \n \n \n +44 (0) 203 405 0235 \n \n \n \n \n  Josh Royston \n \n \n   \n \n \n \n \n  Hilary Buchanan \n \n \n   \n \n \n \n \n  Hannah Campbell \n \n \n   \n \n \n \n \n  Sarah Peters \n \n \n   \n \n \n \n \n   \n About DF Capital \n DF Capital is a speciality lending bank providing award-winning commercial finance solutions and savings products to consumers and small businesses. \n Founded in 2016, the Group is headquartered in Manchester with over 150 employees. DF Capital's lending support the sales of manufacturers, dealers and distributors across a diversified range of both commercial and leisure sectors. In 2020, the Group became a fully authorised bank and started offering a range of consumer savings products that underpin its lending activities. \n The Group is listed on AIM on the London Stock Exchange under the ticker DFCH. For more information, please visit  www.dfcapital.bank \n   \n Chair's Statement \n 2025 has been another exceptional year for the Group. We celebrate our fifth year as a bank and our fourth year of profit. The Board and I are at one that the firm's journey since authorisation has been characterised by outstanding execution against our strategic objectives and flawless delivery of our financial targets, surpassing market expectations again this year. \n It is pleasing to report another year of significant year-on-year growth in lending alongside the launch of new products and services that underpin the Company's strategic ambitions, medium-term guidance and growth trajectory. \n As a Board, we are very focused on the culture prevalent across the firm. There is no doubt that what the management team is delivering is extraordinary, but what is important to us is that these results are underpinned by a positive cultural setting and a keen eye on risk management. You will no doubt see across this year's report not only strong commercial and financial delivery but also that the bank is well-run, manages its risks well and creates an environment where employees can thrive. I truly feel that DF Capital is amongst the best places to work in financial services. \n Having established a comprehensive product suite to support our long-term ambitions, alongside a scalable platform and great technology infrastructure, our firm focus now turns to delivering against our lending objectives and drive continued growth. We remain confident and excited about the opportunities ahead as a multi product lender, entering markets much bigger than our core inventory finance that has supported our profitable growth since authorisation as a bank in 2020. \n Last year we set out our ambitions through to 2028 and whilst these remain a focal point for us, we've refreshed our targets to take a longer view to 2030 - bringing to life our plans for the next five years. What has been achieved over the last five years is astonishing in comparison to many early-stage banks, but we firmly believe the most exciting chapters of our story lie ahead. Importantly, and in light of the healthy levels of profit the Group is generating, our growth plan does not require an additional dilutive tier 1 capital raise; the Group can support its growth plan through retained earnings. Additionally, we believe delivering our maiden dividend will be possible, subject to regulatory approvals, following our 2028 full year results. \n As I said in my report last year, as a Board, we do not put the financial successes of the Group down to good fortune, it is the careful orchestration of a strong strategic focus, great culture, fabulous people, customer centricity and exceptional leadership that brings these sorts of results to life. The management team never tires in their endeavours and demonstrate each and every day their passion for this business. \n I would like to thank the Board of Directors for their enthusiastic support of the management team and specifically express my gratitude to Tom (Thomas) Grathwohl who steps down from the Board this year and will not seek re-election at this year's Annual General Meeting. Tom joined the Company as a founding non-executive and has proven a wise and committed guide through the firm's growth journey. As Tom steps away, we welcomed Richard Green who brings over 35 years financial services leadership experience, many of those working in the lending markets in which DF Capital operates. During the year, we were pleased to welcome Sameera Khaliq to the Board as Chief Financial Officer; her strong financial stewardship, strategic insight and deep sector expertise further strengthen the Group's leadership as we execute the next phase of our growth strategy. \n As shareholders, I hope you read this year's report with immense pride. Without your support and encouragement, the Group would not be making the strides forward that it is each and every year. \n Mark Stephens \n Independent Non-Executive Chair \n   \n Chief Executive Officer's Report \n 2025 has undoubtedly been our best year so far. We have delivered on our financial targets, exceeding expectations in almost all areas; launched new products and services; continued to invest in technology and delivered record breaking results. \n In September 2025, we celebrated our fifth year as a bank, and it's pleasing to report that we have delivered four years of profit - standing-out relative to most other early-stage banks. Throughout that period, we have stayed true to our strategic objectives and purpose to support the growth ambitions of manufacturers, dealers and distributors operating in our chosen markets. Our commitment to these attractive niche areas of lending, supported by deep specialist expertise and our award-winning deposit raising capability, underpin our exceptional financial performance. \n The Group has delivered statutory pre-tax profit of £19.6m (2024: £19.1m), including a £1.5m VAT reclaim. Adjusted pre-tax profit for the period reached £18.1m, up 26% on the prior year (2024: £14.4m). Tangible net asset value per share increased significantly to 75.9p, up 19% on prior year (2024: 63.8p). \n We have demonstrated substantial levels of growth and continued to scale the bank; exhibited excellent pricing discipline; and managed credit risk and operating costs well throughout the year. \n Record breaking performance \n The prevailing macro-economic uncertainties through the period have not hampered our growth. New loan origination reached £1.8bn, up c27% on the prior year (2024: £1.4bn), seeing growth across most products and sectors. \n The Group's loan book closed the year at a record high of £846m, up c27% on the prior year (2024: £666m). Throughout we have maintained a laser focus on pricing discipline and credit quality. Gross yields have held strong at 12.0% (2024: 12.2%) despite falling interest rates and cost of risk improved to 0.59% (2024 adjusted: 0.75%). \n We are supporting more lending customers than ever before. Our manufacturer partners reached 109 and our borrowers (predominantly dealers) has reached in excess of 1,500. \n Inventory Finance: Continuing to grow market share \n We have demonstrated continued growth in our core inventory finance lending product, working with manufacturers and distributors to provide working capital solutions tailored to their stock and business needs. As a result, we have successfully grown market share in most sectors, more than offsetting softer conditions in a small number of areas, highlighting the resilience of our well diversified sector exposure through economic cycles. Our growing market share is a function of our commitment to the markets in which we operate. We've leveraged our specialist underwriting, consistency in service and track record at times when some competitors have made conscious decisions to curtail their lending. We are recognised as easy to do business with and have excellent levels of customer service. \n Dealers across most sectors continued to navigate the macro-economic uncertainty well, particularly those whose customers themselves are financially more secure and have demonstrated resilience to the cost-of-living pressures and elevated interest rates of recent years. \n In the agricultural market, our smallest area of lending, low confidence across the farming community and adverse weather conditions continued to weigh on activity. The holiday home and lodge sector also remained cautious, with operators holding lower stock levels, although confidence is gradually rebuilding, as more parks change ownership and re-establish their attractiveness to holidaymakers and retirees. We have continued to support park rental fleets with our flexible lending products also. It is our expectation that we will see growth in this market as we transition through 2026 and beyond. The motorcycle market remained challenging, with suppressed end user demand and new bike registrations limiting growth in dealer inventory levels. \n Across our commercial sectors, specifically transport and industrial, we have seen stronger levels of demand and greater confidence to hold stock on forecourts, reflecting the critical nature of these assets, replacement-led demand dynamics and the essential role these sectors play in supporting broader economic activity. Fewer electric vehicles are in inventory, with the resurgence of combustion engine variants following changes in government policy on emissions. Business development activities have been strong in this space and we see early fruits of that effort flowing through a growing pipeline of lending and inventory to finance. Likewise, in the automotive and specialist vehicle segments we have seen similar momentum building. \n Our marine business scaled further during the year, through new relationships and growing our market share with existing customers, particularly at the larger vessel end of the market. \n We are pleased that we have continued to grow our market share in the motorhome and caravan sectors, extending what we believe to be our long-standing leadership position as the largest inventory finance provider to UK-based dealers. We've deepened our relationship with manufacturers further, giving us greater access to their dealer network. We are consistently told that our proposition is second to none and we are, in the main, the funder of choice. We continue to selectively support existing caravan and motorhome manufacturer and dealer relationships in the Eurozone, and whilst this is relatively small lending in aggregate, it is providing important intelligence and experience for us to consider other routes to European expansion should we wish to pursue this in the future. We closed the year with loan balances of c€31m (2024: c€5m) to this cohort of customers. \n It is clear to us, given our lending growth and increasing new loan origination, that our inventory finance proposition continues to resonate with our manufacturer and dealer customers; our Net Promotor Score increased materially to +59, up 21pts on 2024 (2024: +38) and well above our sector baseline of +30. Customers regularly call out how easy it is to do business with us, that we are accessible and that we have a friendly and responsive team supported by great technology. \n Structured Finance: virtuous relationships through our tailored financing solutions \n The Group's commitment to the markets and sectors in which we operate is recognised by our customers and wider industry participants. We are creating a virtuous environment where our tailored lending solutions are put to work, bringing to life the ambitions of sector participants and improving the vitality of the markets in which they operate. This creates a halo effect - deepening relationships and reinforcing our commitment to the success and growth of the markets in which we operate. \n Our specialist relationship managers put their expertise to work providing short-term working capital, business related bridging finance, development finance, receivables financing and wholesale lending solutions to our borrowers. These are all lending products in which we have deep expertise across the organisation, made potent by our sector and market knowledge developed over many years lending to our chosen sectors. \n We enjoy strong risk adjusted returns across these bespoke areas of lending, however given the nature of these opportunities with some being short-term in nature, we expect loan balances to generally be in the range of 10-15% of the Group's entire loan book. At the end of the year, the structured finance loans reached c.£113m (2024: £75m). \n Asset finance: beyond the forecourt lending, deepening our relationships with our dealer and manufacturer network \n Our asset finance product helps manufacturers and dealers sell more of their products by providing finance to their customers. We believe this is a natural extension to our existing manufacturer and dealer relationships, unlocking the potential to finance assets \"beyond the forecourt\". \n Having organically built our asset finance capability, made the required investment in systems and technology and received the relevant consumer lending permissions from the Financial Conduct Authority, we launched our \"DFRNT\" asset finance product in Q3 2025. Initially built to support motorhome and caravan dealers, the proposition has now been broadened ahead of the anticipated peak sales period from March. Our offering now extends to include specialist assets such as static caravans, marine vessels and equestrian transport, as well as being able to provide finance for business-critical assets sold by our commercial dealers. This expansion positions us to capture a wider market opportunity and reinforces our commitment to delivering scalable, high-quality asset finance solutions across the sectors we know and understand. \n Our proposition provides something different to existing funders - centred on personalised rates and greater transparency in pricing. We have a broad appetite for lending across prime and near-prime obligors, providing repayments that are priced for the credit profile of the borrower, whilst delivering target risk-adjusted returns. We have invested heavily in the latest technology and automated solutions to ensure that the product is scalable as we look to grow our lending. Our customer journey is easy to navigate and intuitive for both dealers and their customers. \n The markets available to us are significant in size and we estimate total sales of our dealer network exceeds £10bn per annum. Whilst we won't convert every sale to a purchase funded by our finance solution, the size of the market opportunity materially outpaces the required growth to hit our 2028 and 2030 targets. Unlike our core inventory finance, lending is longer in tenor and loan balances are much \"stickier\" (typically 4-5 years effective duration vs 150 days), meaning that our annual new loan origination requirements are relatively low whilst still fuelling an acceleration of our medium-term loan book growth. \n We have already started to work with existing manufacturer partners with campaigns to support new products and expect momentum to build through 2026. Our asset finance product will be distributed, in the main, through our existing manufacturer, dealer and distributor relationships. Some dealers, who do not finance their inventory with us, have expressed an interest in \"DFRNT\" providing us with further areas for growth. \n Risk adjusted returns are broadly commensurate with our other lending activities, meaning where we put our capital to work is entirely fungible across the Group's entire suite of lending products, allowing us to diligently maximise returns on capital. \n Making investments for the longer term \n We are committed to providing our customers with great levels of service. We consistently receive excellent client engagement scores from our borrowers and depositors alike. We believe that leveraging the latest technology to drive efficiency whilst offering customers high-quality human touchpoints with our team delivers competitive advantage. We want our team members to enrich customer experiences, providing guidance and support rather than navigating poor technology, legacy systems and handling paper-based records or applications. \n We adopted optical character recognition and robotic process automation early in our journey and are now enhancing this through the latest artificial intelligence tools. Our technology infrastructure is modular in nature, allowing us to swap out older capabilities for newer more efficient developments and financial technology solutions. \n The deployment of new technology is embedded in our DNA and we are well resourced to support this. We continuously make enhancements and improvements each year using a combination of our own internal talent and external third parties. \n In 2025, we made major investments in the organic build-out of the asset finance product, following our digital first approach, leveraging best in class technology partnerships to build a uniquely DF Capital customer experience. \n We believe leveraging technology and building scalable processing capabilities, coupled with growth in our loan book, unlocks intrinsic operational leverage and enables the achievement of our cost-to-income targets over the medium-term. \n This year we made the decision to move our headquarters and operating centre into new offices remaining in Manchester. This investment, which saw us take additional office space, provides a high-quality future-proof environment for our team to work. Given the emerging trends in hybrid working, we have looked to create an engaging and modern environment for all types of work, collaboration and wider engagement, with employee wellbeing being an important component to effective office life. I firmly believe that our team performs at its best when co-located and operating face-to-face in the office. \n Aiming to be amongst the Best Places to Work in the UK \n We have a track record of delivering exceptional levels of employee engagement. We believe our culture makes us a unique proposition for new recruits but also ensuring we retain our existing colleagues. \n I believe we have a team that is passionate about what we do, are highly invested in our strategic ambitions, understand where we are heading and consistently want to do the right thing for our customers, communities and ultimately our shareholders. Our outstanding financial results are underpinned by a positive culture across the firm, but also an eye to performance management and doing what we say we are going to do. \n We have a strong track record of external recognition for employee engagement and workplace culture, having achieved a number of respected accreditations in recent years. Having completed the Best Places to Work survey for the year in review, our employee feedback has been rated \"excellent\" across all categories of employee satisfaction and engagement, the highest available, with results benchmarking well above both sector and global comparators. \n Creating an environment where our employees feel recognised for their contribution, that they can thrive, feel safe and can fulfil their career ambitions, whilst seeking out opportunities to grow and develop is a non-negotiable imperative for us and is firmly in our DNA right across the organisation. \n Outlook \n We are now entering an exciting chapter of our story. The next five-years sees us tooled up with all the products, services and technology we need to deliver on our well-defined 2030 targets that we set out in January 2026; reaching a loan book in excess of £1.5bn; cost to income ratio in the range of 45-48%; a return on required equity of c.20%; and growing tangible net assets by 10-15% per annum. \n We have access to the markets which underpin our growth and have more opportunities to support new loan origination than ever before. We are well capitalised and are now in a virtuous cycle where continued healthy retained earnings support organic capital generation. The Board believes the journey to these targets supports its intention to introduce a maiden dividend following the year ending 31 December 2028. \n The entire DF Capital team is excited about our ambitious 2030 plan - the opportunities ahead of us are immense. I'm proud of what we've achieved so far in our journey but am looking forward to leading our talented team to achieve bigger and better things. Whilst 2025 has been undoubtedly our best year so far, I firmly believe that our best and most exciting days are ahead of us \n Carl D'Ammassa \n Chief Executive Officer \n   \n Chief Financial Officer's Report \n Financial overview \n I am delighted to present my first financial report since joining the Group in May 2025. 2025 has been another year of strong and resilient financial performance from the Group, underpinned by disciplined balance sheet management and risk appetite, expansion of our products and services and continued investment in core capabilities. Against a backdrop of economic uncertainty and a changing interest rate environment, the Group maintained strong capital and liquidity positions while continuing to support customers and deliver sustainable returns. \n Profitability continued on an upward trajectory for the fourth consecutive year, out of our five years as a bank, with pre-tax profit reaching £19.6m (December 2024: £19.1m). Exceptional growth in lending, delivered at strong returns, has been a key driver of this performance. During the year, the Group also successfully concluded a Partial Exemption Special Method (\"PESM\") VAT reclaim with the HMRC, resulting in favourable recovery of £1.5m. Excluding this recovery underlying profit before tax increased to £18.1m, up 26% on the prior year (2024: £14.4m). \n We achieved solid financial results across several of our key performance measures, with adjusted return on tangible equity 1 climbing to 11.9% (December 2024: 9.9%) and adjusted basic earnings per share 1 for the year of 8.3p (2024: 5.9p). TNAV per share, which provides an indication of the Group's tangible capital base available to shareholders, calculated after deducting intangible assets, was also up 19% to 75.9p (2024: 63.8p). This reflects the strength and growing value in our business. \n During the period, the bank successfully executed a share buy-back programme in line with our capital allocation framework, reflecting the Board's confidence in the Group's financial strength, long-term strategy, and the intrinsic value of its shares. A total of 12,966,866 of ordinary shares were repurchased. \n 1. Adjusted metrics reflect a one-off VAT recovery in FY25 relating to prior periods and FY24 reallocates a one-off impairment recovery. \n Strong balance sheet growth and resilient net interest margin underpin income growth \n The Group has delivered positive loan book growth in the year, generating gross revenues, which are predominantly comprised of interest and similar income, of £90.9m (2024: £76.7m), up 19% on prior year. \n Lending growth continues to be fully funded through the retail savings market, with expansion in the loan book matched by growth in customer deposits. Savings balances grew strongly over the year, closing at £841m (December 2024: £650m). Total interest expense reached £34.9m (December 2024: £31.2m), largely reflecting retail balance growth and competitive pricing for savers. \n Net interest margin (\"NIM\"), which categorises the interaction between asset yields and funding costs, has remained resilient at 8.0% (2024: 7.9%), despite a declining bank base rate, falling by 1% to 3.75% over the period. \n Overall asset yields moderated but remained robust at 12.0% for the period (2024: 12.2%). The reduction reflects the lower interest rate environment, as our asset pricing is structurally linked to bank base rate. Asset yields have therefore repriced downward in line with the reduction in base rate. Given the gradual repricing profile of the balance sheet, the full impact of this 1% base rate cut is not expected to be realised until 2026. Our continued discipline in pricing approach and balance sheet mix optimisation has further supported overall returns. \n On the liabilities side, retail savings rates have also repriced lower in response to the downward shift in central bank rate. Customer pricing moved broadly in line with market conditions, helping to offset the overall impact on net interest income. The average customer rate for retail deposits decreased to 4.42% at the period end (December 2024: 5.16%). Despite these reductions, the Group's product offerings have remained competitive, delivering on our commitment to offer market leading rates, consistently featuring in independent \"best buy\" tables. It is important to mention that our savings proposition continues to receive positive endorsement from our depositors. We consistently achieve 4.8 feefo stars and have received feefo's Platinum Trusted Service Award for a third time this year. \n Overall net income, which is predominately interest income earned on assets (principally loans and advances, and liquidity), less interest paid on liabilities (principally retail savings and Tier 2 capital) reached £56.0m in 2025 (2024: £45.5m), an increase of 23%. A detailed composition is set out below: \n \n \n \n \n Summarised Statement of Comprehensive Income (£m) \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n % \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Gross revenues \n \n \n 90.9 \n \n \n 76.7 \n \n \n 19% \n \n \n \n \n Interest expense \n \n \n (34.9) \n \n \n (31.2) \n \n \n (12)% \n \n \n \n \n Net income \n \n \n 56.0 \n \n \n 45.5 \n \n \n 23% \n \n \n \n \n Operating expenses \n \n \n (32.2) \n \n \n (26.6) \n \n \n 21% \n \n \n \n \n Impairment and provisions \n \n \n (4.2) \n \n \n 0.2 \n \n \n n/a \n \n \n \n \n Profit before tax \n \n \n 19.6 \n \n \n 19.1 \n \n \n 3% \n \n \n \n \n Impact of VAT recovery in 2025 \n \n \n (1.5) \n \n \n - \n \n \n n/a \n \n \n \n \n Impact of RoyaleLife write back in 2024 \n \n \n - \n \n \n (4.7) \n \n \n n/a \n \n \n \n \n Adjusted profit before tax \n \n \n 18.1 \n \n \n 14.4 \n \n \n 26% \n \n \n \n \n   \n Investing for growth while maintaining cost discipline \n Cost discipline has been maintained throughout the period, notwithstanding investment in the Group's strategic growth priorities. These investments were targeted at enabling colleagues to operate more efficiently, strengthening controls as the business grows, and supporting consistent service delivery to customers. Operating expenses for the year totalled £32.2m (2024: £26.6m), reflecting conscious investment in scalable platforms and capabilities, with overall cost to income ratio for the period being 57.4% (December 2024: 58.5%). \n Operationally, the Group remains focussed on growing into our cost base, maximising the benefits of our scalable platforms. Average headcount increased to 155 at the end of the period (31 December 2024: 137 employees), reflecting investment in specialists to support the asset finance proposition, alongside continued strengthening of the Group's Change and Risk capabilities. These investments enhance the Group's ability to execute its strategic roadmap and ensure that the risk and control framework remains aligned with regulatory expectations as the business grows. \n The Group continued to progress targeted technology initiatives to enhance operational efficiency. This has included implementation of workflow automation solutions to enhance our customer due diligence processes, supporting more efficient customer onboarding and regulatory compliance. \n The Group also invested in a new, significantly larger office during the year, underpinning its long-term growth ambitions and operational capability. \n Looking ahead, the Group expects to benefit from increasing operational leverage as recent investments scale, supporting continued growth while maintaining a disciplined approach to cost management, supporting a widening of jaws between cost and income. \n Disciplined approach to credit risk maintains strong credit performance \n Despite the challenging macro-economic environment, the Group's lending portfolios have continued to perform well, and asset quality remains within the appetite set by the Board. \n With a strong credit discipline embedded in our credit origination and ongoing in life portfolio management, we continue to originate new lending in line with credit policy and overdue accounts are tightly controlled and managed. \n Customer accounts with payments one day or more past due, are classified as in arrears. The total number of customers with arrears, including those in legal recovery, at 31 December 2025 was 39 (31 December 2024: 33), representing only 2.7% of our total dealer base (31 December 2024: 2.3%). The corresponding arrears value at the period end was £7.2m (31 December 2024: £4.8m), equal to 0.85% (December 2024: 0.72%) of the Group's total lending book, which is within appetite. Of this, 33 cases, with total exposure of £6.7m were in legal recovery, where the Group works diligently to recover assets over the necessary period. Appropriate loan provisions are individually assessed and in place for all cases in recovery. \n Arrears performance can be summarised as follows: \n \n \n \n \n Arrears (£'000) \n \n \n   \n \n \n \n \n \n \n \n (Arrears - principal repayment, fees and interest) \n \n \n 31-Dec-25 \n \n \n 31-Dec-24 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n < 30 days past due (early) \n \n \n 175 \n \n \n 1,101 \n \n \n \n \n 31-90 days past due (mid/late) \n \n \n 350 \n \n \n 739 \n \n \n \n \n >90 days past due (in-default) \n \n \n 6,670 \n \n \n 2,976 \n \n \n \n \n Total arrears \n \n \n 7,195 \n \n \n 4,816 \n \n \n \n \n % of loan book \n \n \n 0.85% \n \n \n 0.72% \n \n \n \n \n   \n Provision adequacy is consistent with previous years, and Cost of Risk remains within appetite at 0.59% for 2025 (2024 adjusted 2 : 0.75%), reflecting pro-active management of problem cases and our continuing ability to remediate dealer defaults by product redistribution through the customer network or sale of secured assets to other parties. 2. Adjusted metric reflects a one-off impairment recovery in FY24 \n We take security of our assets to strengthen our position \n The Group's core Inventory Finance lending is secured by taking legal title over individual assets, enabling the provision of working capital to fund dealers' inventory. Credit risk remains well controlled, with lending maintained at a Loan to Wholesale Value (\"LTV\") of approximately 87% (31 December 2024: 84%). \n Advances are based on wholesale invoice values rather than retail prices, which typically include a mark-up of around 20% above wholesale cost. As a result, for the Group to experience a loss following a default, average retail prices across relevant sectors would need to decline by approximately 30% at the point of asset recovery. \n Further credit mitigation is provided through manufacturer repurchase or redistribution arrangements, which cover c.60% of the inventory finance loan book (2024: c.60%). In addition, the Group also benefits from supplementary security in the form of personal and/or cross company guarantees. \n Portfolio ageing \n Portfolio stock days in The Group's inventory finance lending book, which are defined as the average age of loans outstanding, help the Group determine how its portfolio is ageing compared to historical experience and sector tolerance levels used for portfolio oversight. At the end of December 2025, this has reduced to 129 days (December 2024: 140 days) and remains comfortably within sector levels. As the lending book grows and diversifies, with more asset finance lending expected over the medium term, stock days are expected to be less significant in the Group's reporting KPI's. \n \n \n \n \n Stock turn (average age of loan outstanding - days) \n \n \n \n \n \n \n \n Recent trend vs expected norms \n \n \n Historical \n \n \n Tolerance \n \n \n 31-Dec \n \n \n 31-Dec \n \n \n \n \n Annual \n \n \n Level \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n \n \n \n New Loans \n \n \n Repayments \n \n \n Average \n \n \n \n \n \n \n \n \n \n \n \n \n \n Agriculture \n \n \n Lower \n \n \n Slower \n \n \n 119 \n \n \n 240 \n \n \n 176 \n \n \n 153 \n \n \n \n \n Automotive \n \n \n Higher \n \n \n In line \n \n \n 73 \n \n \n 200 \n \n \n 71 \n \n \n 80 \n \n \n \n \n Industrial \n \n \n In line \n \n \n Slower \n \n \n 120 \n \n \n 250 \n \n \n 177 \n \n \n 179 \n \n \n \n \n Lodges \n \n \n Lower \n \n \n Slower \n \n \n 154 \n \n \n 300 \n \n \n 210 \n \n \n 278 \n \n \n \n \n Marine \n \n \n Higher \n \n \n Slower \n \n \n 132 \n \n \n 250 \n \n \n 146 \n \n \n 119 \n \n \n \n \n Motorcycle \n \n \n In line \n \n \n In Line \n \n \n 107 \n \n \n 200 \n \n \n 111 \n \n \n 107 \n \n \n \n \n Motorhome & Caravan \n \n \n Higher \n \n \n In Line \n \n \n 105 \n \n \n 200 \n \n \n 132 \n \n \n 125 \n \n \n \n \n Transport \n \n \n Higher \n \n \n In Line \n \n \n 86 \n \n \n 200 \n \n \n 89 \n \n \n 93 \n \n \n \n \n Loan Book Average \n \n \n \n \n \n \n \n \n 128 \n \n \n 240 \n \n \n 129 \n \n \n 140 \n \n \n \n \n   \n Funding stability supports robust liquidity position \n The Group maintained a strong and prudent liquidity position throughout the period, supported by a stable funding base and disciplined liquidity management. Liquidity resources remained comfortably in excess of internal risk appetite and regulatory requirements, providing appropriate headroom to support growth and withstand potential market shocks. Liquidity Coverage Ratio was at 693% at the period end. \n The Group's funding profile continues to benefit from a diversified retail deposit base, enhancing overall funding stability. The savings proposition remained attractive and competitive throughout the period, driving resilient customer behaviour for both retention and new acquisition. \n The Group actively manages its liquidity risk through regular stress testing, scenario analysis and monitoring against Board approved limits, ensuring the Group meets its obligations as they fall due. Extreme economic scenarios are also run to ensure our contingency plans remain robust. \n Our capital position unlocks our growth ambitions \n The Group is required to manage its capital in accordance with regulatory rules and guidance. Our capital position remained robust throughout the year, supporting balance sheet growth. Total equity ended the period at £127.2m (31 December 2024: £115.4m). Regulatory capital, which is Common Equity Tier 1 (CET1) capital together with Tier 2 capital, increased to £127.7m (31 December 2024: 109.0m). This includes an additional £5m drawn in 2025 from our Tier 2 capital facility with British Business Investments, taking overall drawdown to £15m at the period end, from a total available facility of £20m. \n The Group continues to leverage the benefit of the ENABLE Guarantee with the British Business Bank, with a pool of up to £350m of lending. Across the year, the Group secured agreement to include different product categories within this lending pool, ensuring maximum efficiency and utilisation of the scheme. \n Combined with strong retained earnings, these capital levers have enabled an increase in our lending book of 27%, whilst preserving CET1 ratio at 18.0% (31 December 2024: 21.6%), well above our regulatory minima. \n With expectations of further retained earnings, negotiations for a renewed agreement with British Business Bank expected to complete in the first half of 2026 and capacity for more Tier 2 capital, the Group remains confident in its capital headroom, which supports our medium-term growth ambitions without the need for a dilutive equity raise. This positive capital position unlocks our strategic ambitions, with opportunity for accelerated growth, portfolio acquisitions and/or returns of capital to shareholders by way of share buyback or dividends. \n Sameera Khaliq \n Chief Financial Officer \n   \n Report of the Directors \n The Directors present their Annual Report on the affairs of the Group, together with the consolidated financial statements, company financial statements and auditor's report, for the year ended 31 December 2025. \n   \n Details of significant subsequent events are contained in note 43 to these consolidated financial statements. An indication of likely future developments in the business of the Group are included in the Strategic Report section. \n   \n Information about the use of financial instruments by the Group is detailed within note 37 to the consolidated financial statements. \n   \n Principal activity \n The principal activity of the Group is as a specialist commercial lending and savings bank group. The Group provides niche working capital funding solutions to distributors and manufacturers across the UK, enabled by competitively priced customer savings products. \n   \n Results and dividends \n The total comprehensive profit for the year, after taxation, amounted to £15,159,000 (2024: £14,096,000). The Directors do not recommend the payment of a dividend (2024: £nil). \n   \n Directors \n The Directors who held office during the year and up to the date of the Directors' report were as follows: \n   \n Mark Stephens \n Sheryl Lawrence                                               \n Nicole Coll                                           \n Thomas Grathwohl \n Richard Green (appointed 17 September 2025) \n Haakon Stenrød                                               \n Carl D'Ammassa                                               \n Gavin Morris (resigned 31 July 2025) \n Sameera Khaliq (appointed 7 July 2025) \n   \n Directors' shareholdings \n As at 31 December 2025, the Directors held the following ordinary shares in the Company: \n \n \n \n \n Director  \n \n \n Position \n \n \n No. of ordinary shares \n \n \n Voting rights (%) \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Mark Stephens \n \n \n Independent Board Chair \n \n \n              82,119 \n \n \n 0.05% \n \n \n \n \n Thomas Grathwohl \n \n \n Independent Non-Executive Director \n \n \n            533,312 \n \n \n 0.32% \n \n \n \n \n Carl D'Ammassa \n \n \n Chief Executive Officer \n \n \n            769,648 \n \n \n 0.46% \n \n \n \n \n   \n Significant shareholders \n As at 31 December 2025, the following parties held greater than 3% of issued share capital in the Company in accordance with the requirements of Rule 5 of the Disclosure Guidance and Transparency Rules: \n \n \n \n \n   \n \n \n No. of ordinary shares \n \n \n Voting rights (%) \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Watrium AS \n \n \n                                                30,577,593 \n \n \n 18.34% \n \n \n \n \n Janus Henderson Investors \n \n \n                                                17,353,430 \n \n \n 10.41% \n \n \n \n \n River Global Investors \n \n \n                                                16,400,000 \n \n \n 9.84% \n \n \n \n \n Lombard Odier Investment Managers \n \n \n 15,909,961 \n \n \n 9.54% \n \n \n \n \n UBS Securities \n \n \n                                                14,844,505 \n \n \n 8.90% \n \n \n \n \n Crucible Clarity Fund \n \n \n                                                  8,628,633 \n \n \n 5.18% \n \n \n \n \n Premier Milton Investors \n \n \n                                                  8,175,000 \n \n \n 4.90% \n \n \n \n \n Hargreaves Lansdown Asset Management \n \n \n 5,121,344 \n \n \n 3.07% \n \n \n \n \n   \n Political and charitable donations \n The Group made charitable donations of £119,313 (2024: £23,355) and no political donations during the year ended 31 December 2025 (2024: £nil). \n   \n Annual General Meeting \n The Company anticipates holding its Annual General Meeting in May 2026.  The Notice of AGM and Form of Proxy will be posted to shareholders in due course and a copy will be available at www.dfcapital-investors.com. The AGM will be held at the Company's registered office in Manchester. \n   \n Directors' insurance and indemnities \n The Group has maintained Directors and Officers liability insurance for the benefit of the Group, the Directors, and its officers. The Directors consider the level of cover appropriate for the business and will remain in place for the foreseeable future. \n   \n Statement of Going Concern \n The Directors have completed a formal assessment of the Group's financial resources. In making this assessment the Directors have considered the Group's current available capital and liquidity resources, the business financial projections and the outcome of stress testing. Based on this review, the Directors believe that the Group is well placed to manage its business risks successfully within the expected economic outlook. See note 1.6 for further details. \n   \n Accordingly, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for a period of at least 12 months from the date of approval of the financial statements. Accordingly, they continue to adopt the going concern basis in preparing the Annual Report and Financial Statements. \n   \n Corporate Governance \n The Corporate Governance Report on pages 61 to 95 contains information about the Group's corporate governance arrangements. \n   \n Subsequent events \n Details relating to significant events occurring between 31 December 2025 and the date of approval of the financial statements are detailed further within note 43 of the consolidated financial statements. \n   \n Disclosure of information to the auditor \n Each of the persons who is a Director at the date of approval of this annual report confirms that: \n   \n \n \n \n \n § \n \n \n so far as the Director is aware, there is no relevant audit information of which the Company's auditors are unaware; and \n \n \n \n \n § \n \n \n the Director has taken all the steps that they ought to have taken as a Director in order to make themself aware of any relevant audit information and to establish that the Company's auditors are aware of that information. \n \n \n \n \n This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006. \n   \n Reappointment of auditor \n Deloitte LLP have expressed their willingness to continue in office as auditors and a resolution to reappoint them will be proposed at the forthcoming Annual General Meeting. \n   \n   \n Approved by the Board on 20 March 2026 and signed on its behalf by: \n   \n   \n   \n ……………………………………….. \n Carl D'Ammassa \n Director \n   \n \n \n Statement of Directors' Responsibilities \n   \n The Directors are responsible for preparing the Annual Report and the Group and parent Company financial statements in accordance with applicable law and regulations. \n   \n Company law requires the Directors to prepare Group and parent Company financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom adopted International Accounting Standards. The financial statements also comply with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB). The Directors have chosen to prepare the parent Company financial statements on the same basis. \n   \n Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and parent Company and of their profit or loss of the Group for the year. \n   \n In preparing these consolidated financial statements and Company financial statements, the Directors are required to: \n   \n \n \n \n \n § \n \n \n properly select and apply accounting policies; \n \n \n \n \n § \n \n \n present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; \n \n \n \n \n § \n \n \n provide additional disclosures when compliance with the specific requirements of the financial reporting framework are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and \n \n \n \n \n § \n \n \n make an assessment of the company's ability to continue as a going concern. \n \n \n \n \n The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's transactions and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the financial statements comply with the Companies Act 2006.  They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities. \n   \n Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors' Report, and Corporate Governance Statement that complies with that law and those regulations. \n   \n The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. \n   \n Responsibility statement of the Directors in respect of the annual financial report \n   \n Each of the persons who is a Director at the date of approval of this report confirms, to the best of their knowledge, that: \n   \n \n \n \n \n § \n \n \n the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole; \n \n \n \n \n § \n \n \n the Strategic Report/Directors' Report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and \n \n \n \n \n § \n \n \n the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy. \n \n \n \n \n \n \n Consolidated Statement of Comprehensive Income \n   \n \n \n \n \n   \n   \n \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n \n \n \n Note \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Interest and similar income \n \n \n 4 \n \n \n                   90,698 \n \n \n 76,820 \n \n \n \n \n Interest and similar expenses \n \n \n 5 \n \n \n                  (34,897) \n \n \n  (31,208) \n \n \n \n \n Net interest income \n \n \n   \n \n \n                   55,801 \n \n \n 45,612 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Fee income \n \n \n 6 \n \n \n                     1,684 \n \n \n 1,237 \n \n \n \n \n Fee expenses \n \n \n 7 \n \n \n                    (1,608) \n \n \n  (1,626) \n \n \n \n \n Net (losses)/gains from derivatives and other financial instruments at fair value through profit or loss \n \n \n 21 \n \n \n                       (773) \n \n \n 372 \n \n \n \n \n Other income \n \n \n               8 \n \n \n                          28 \n \n \n 2 \n \n \n \n \n Foreign currency gain/(loss) \n \n \n \n \n \n 907 \n \n \n (107) \n \n \n \n \n Total operating income \n \n \n   \n \n \n                   56,039 \n \n \n 45,490 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Staff costs \n \n \n 9 \n \n \n                  (20,684) \n \n \n  (16,044) \n \n \n \n \n Other operating expenses \n \n \n 11 \n \n \n                  (11,497) \n \n \n (10,563) \n \n \n \n \n Net impairment (loss)/gain on financial assets \n \n \n 13 \n \n \n                    (4,267) \n \n \n 241 \n \n \n \n \n Other provisions \n \n \n 12 \n \n \n                          50 \n \n \n  (50) \n \n \n \n \n Total operating profit \n \n \n   \n \n \n                   19,641 \n \n \n 19,074 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit before taxation \n \n \n   \n \n \n                   19,641 \n \n \n 19,074 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Taxation \n \n \n 15 \n \n \n                    (4,482) \n \n \n  (5,053) \n \n \n \n \n Profit after taxation \n \n \n   \n \n \n                   15,159 \n \n \n 14,021 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Other comprehensive income: \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Items that may subsequently be transferred to the income statement: \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n FVOCI investment securities: \n \n \n \n \n \n \n \n \n \n \n \n \n \n                    Amounts transferred to the income statement \n \n \n \n \n \n - \n \n \n                      75 \n \n \n \n \n Total other comprehensive income for the year, net of tax \n \n \n   \n \n \n                             - \n \n \n                      75 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total comprehensive income for the year \n \n \n   \n \n \n                   15,159 \n \n \n 14,096 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Earnings per share: \n \n \n   \n \n \n Pence \n \n \n Pence \n \n \n \n \n Basic EPS \n \n \n 38 \n \n \n                         8.9 \n \n \n 7.8 \n \n \n \n \n Diluted EPS \n \n \n 38 \n \n \n                         8.4 \n \n \n 7.4 \n \n \n \n \n   \n   \n The notes on pages 116 to 177 are an integral part of these financial statements. \n   \n The financial results for all periods are derived entirely from continuing operations. \n   \n \n \n Consolidated Statement of Financial Position \n   \n \n \n \n \n \n \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n \n \n \n Note \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Assets \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Cash and balances at central banks \n \n \n \n \n \n                    131,676 \n \n \n                      110,030 \n \n \n \n \n Loans and advances to banks \n \n \n 27 \n \n \n                        5,894 \n \n \n                          3,771 \n \n \n \n \n Investment securities \n \n \n 20 \n \n \n                        5,722 \n \n \n                              769 \n \n \n \n \n Derivatives held for risk management (asset) \n \n \n 21 \n \n \n                           411 \n \n \n                              295 \n \n \n \n \n Loans and advances to customers \n \n \n 19 \n \n \n                    839,526 \n \n \n 660,772 \n \n \n \n \n Trade and other receivables \n \n \n 23 \n \n \n                        7,734 \n \n \n                          4,678 \n \n \n \n \n Current taxation asset \n \n \n 24 \n \n \n 40 \n \n \n - \n \n \n \n \n Deferred taxation asset \n \n \n 26 \n \n \n 1,912 \n \n \n                          3,980 \n \n \n \n \n Property, plant and equipment \n \n \n 16 \n \n \n 3,797 \n \n \n                          1,093 \n \n \n \n \n Right-of-use assets \n \n \n 17 \n \n \n 2,355 \n \n \n 202 \n \n \n \n \n Intangible assets \n \n \n 18 \n \n \n 745 \n \n \n                              950 \n \n \n \n \n Total assets \n \n \n   \n \n \n 999,812 \n \n \n 786,540 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Liabilities \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Customer deposits \n \n \n 34 \n \n \n                    840,565 \n \n \n                      649,665 \n \n \n \n \n Amounts due to banks \n \n \n 21 \n \n \n                                - \n \n \n 180 \n \n \n \n \n Derivatives held for risk management (liability) \n \n \n 21 \n \n \n                           819 \n \n \n                                  6 \n \n \n \n \n Fair value adjustments on hedged liabilities \n \n \n 22 \n \n \n                           375 \n \n \n                              136 \n \n \n \n \n Financial liabilities \n \n \n 33 \n \n \n                        2,444 \n \n \n 90 \n \n \n \n \n Trade and other payables \n \n \n 36 \n \n \n                      12,822 \n \n \n 9,335 \n \n \n \n \n Provisions \n \n \n 12 \n \n \n                           255 \n \n \n 285 \n \n \n \n \n Current taxation liability \n \n \n 25 \n \n \n                            - \n \n \n                          1,259 \n \n \n \n \n Subordinated liabilities \n \n \n 35 \n \n \n                      15,302 \n \n \n                        10,230 \n \n \n \n \n Total liabilities \n \n \n   \n \n \n                    872,582 \n \n \n 671,186 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Equity \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Issued share capital \n \n \n 30 \n \n \n                        1,793 \n \n \n                          1,793 \n \n \n \n \n Merger relief \n \n \n 30 \n \n \n                      94,911 \n \n \n                        94,911 \n \n \n \n \n Merger reserve \n \n \n 32 \n \n \n                     (20,609) \n \n \n                      (20,609) \n \n \n \n \n Own shares \n \n \n 31 \n \n \n                          (548) \n \n \n                            (440) \n \n \n \n \n Treasury shares \n \n \n 30 \n \n \n                       (4,755) \n \n \n - \n \n \n \n \n Retained earnings \n \n \n \n \n \n                      56,438 \n \n \n 39,699 \n \n \n \n \n Total equity \n \n \n   \n \n \n                    127,230 \n \n \n 115,354 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total equity and liabilities \n \n \n   \n \n \n                    999,812 \n \n \n 786,540 \n \n \n \n \n   \n   \n The notes on pages 116 to 177 are an integral part of these consolidated financial statements. \n   \n These financial statements were approved by the Board of Directors and authorised for issue on 20 March 2026. They were signed on its behalf by: \n   \n   \n   \n   \n …………………………… \n Carl D'Ammassa \n Director \n 20 March 2026 \n   \n Registered number: 11911574 \n \n \n Consolidated Statement of Changes in Equity \n   \n \n \n \n \n \n \n \n Issued share capital \n \n \n Merger relief \n \n \n Merger reserve \n \n \n Own shares 2 \n \n \n Treasury Shares 3 \n \n \n Retained earnings \n \n \n Total \n \n \n \n \n   \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Balance at 1 January 2024 \n \n \n             1,793 \n \n \n 94,911 \n \n \n  (20,609) \n \n \n  (401) \n \n \n  - \n \n \n          24,720 \n \n \n 100,414 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit after taxation \n \n \n                      - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n          14,021 \n \n \n 14,021 \n \n \n \n \n Other comprehensive income \n \n \n                      - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n                      75 \n \n \n 75 \n \n \n \n \n Total comprehensive income \n \n \n                      - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n          14,096 \n \n \n 14,096 \n \n \n \n \n Share-based payments 1 \n \n \n                      - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n                985 \n \n \n 985 \n \n \n \n \n Employee Benefit Trust 2 \n \n \n                      - \n \n \n - \n \n \n - \n \n \n (39) \n \n \n  - \n \n \n              (102) \n \n \n  (141) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Balance at 31 December 2024 \n \n \n             1,793 \n \n \n 94,911 \n \n \n  (20,609) \n \n \n  (440) \n \n \n  - \n \n \n          39,699 \n \n \n 115,354 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit after taxation \n \n \n                      - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n                15,159 \n \n \n 15,159 \n \n \n \n \n Other comprehensive income \n \n \n                      - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n                          - \n \n \n - \n \n \n \n \n Total comprehensive income \n \n \n                      - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n                15,159 \n \n \n 15,159 \n \n \n \n \n Share-based payments 1 \n \n \n                      - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n                  1,254 \n \n \n 1,254 \n \n \n \n \n Employee Benefit Trust 2 \n \n \n                      - \n \n \n - \n \n \n - \n \n \n (108) \n \n \n  - \n \n \n  (84) \n \n \n  (192) \n \n \n \n \n Share Buyback \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (4,877) \n \n \n - \n \n \n (4,877) \n \n \n \n \n Settlement of share options 4 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 122 \n \n \n (6) \n \n \n 116 \n \n \n \n \n Deferred tax asset on share-based payments 5 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 416 \n \n \n 416 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Balance at 31 December 2025 \n \n \n             1,793 \n \n \n 94,911 \n \n \n  (20,609) \n \n \n  (548) \n \n \n (4,755) \n \n \n 56,438 \n \n \n 127,230 \n \n \n \n \n   \n 1 Refer to note 10 for details on share-based payments during the year. \n 2 The Group has adopted look-through accounting (see note 1.3) and recognised the Employee Benefit Trust as Own Shares. Refer to note 31 for further details of the movements in the year. \n 3 During the year, the Group repurchased 12,966,866 shares at a total cost of £4,877,000 inclusive of commission. These treasury shares do not carry voting rights or rights to dividends while held by the Company. \n 4 During the year, the Group used treasury shares to settle the vesting of a share option scheme. \n 5 During the year, the Group recognised a deferred tax asset of £1,311,000 in respect of share-based payments, of which £895,000 has reduced the current year tax charge and £416,000 has been recognised directly in retained earnings. \n   \n The notes on pages 116 to 177 are an integral part of these consolidated financial statements. \n \n \n Consolidated Cash Flow Statement \n   \n \n \n \n \n \n \n \n \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n \n \n \n Note \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash flows from operating activities: \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit before taxation \n \n \n \n \n \n                     19,641 \n \n \n                       19,074 \n \n \n \n \n Adjustments for non-cash items and other adjustments Included in the income statement \n \n \n 28 \n \n \n                       7,794 \n \n \n                          3,822 \n \n \n \n \n Increase in operating assets \n \n \n 28 \n \n \n                  (186,354) \n \n \n  (92,390) \n \n \n \n \n Increase in operating liabilities \n \n \n 28 \n \n \n                   195,168 \n \n \n                       79,376 \n \n \n \n \n Taxation paid \n \n \n 24,25 \n \n \n                      (3,296) \n \n \n                           (681) \n \n \n \n \n Net cash generated from operating activities \n \n \n   \n \n \n                     32,953 \n \n \n                          9,201 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash flows from investing activities: \n \n \n \n \n \n \n \n \n \n \n \n \n \n Purchase of investment securities \n \n \n \n \n \n                         (498) \n \n \n (9,918) \n \n \n \n \n Proceeds from sale and maturity of investment securities \n \n \n \n \n \n                          500 \n \n \n 25,000 \n \n \n \n \n Dividends received on money market funds \n \n \n \n \n \n                            57 \n \n \n                               25 \n \n \n \n \n Interest received on investment securities \n \n \n \n \n \n                              2 \n \n \n                             75 \n \n \n \n \n Purchase of property, plant and equipment \n \n \n 16 \n \n \n                      (3,557) \n \n \n                           (397) \n \n \n \n \n Cash received on disposal of property, plant and equipment \n \n \n \n \n \n                            34 \n \n \n - \n \n \n \n \n Purchase of right of use assets \n \n \n \n \n \n                           (81) \n \n \n - \n \n \n \n \n Purchase of intangible assets \n \n \n 18 \n \n \n (80) \n \n \n                           (623) \n \n \n \n \n Net cash (used in)/generated from investing activities \n \n \n   \n \n \n (3,623) \n \n \n 14,162 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash flows from financing activities: \n \n \n \n \n \n \n \n \n \n \n \n \n \n Repayment of lease liabilities \n \n \n 33 \n \n \n                         (108) \n \n \n                           (252) \n \n \n \n \n Issuance of subordinated liabilities \n \n \n 35 \n \n \n                       5,000 \n \n \n                                   - \n \n \n \n \n Coupon paid on subordinated liabilities \n \n \n 28 \n \n \n                      (1,269) \n \n \n                        (1,273) \n \n \n \n \n Purchase of own shares \n \n \n 31 \n \n \n                         (192) \n \n \n                           (142) \n \n \n \n \n Purchase of treasury shares \n \n \n 30 \n \n \n                      (4,877) \n \n \n - \n \n \n \n \n Receipt of cash from settlement of share options \n \n \n \n \n \n                          116 \n \n \n - \n \n \n \n \n Net cash used in financing activities \n \n \n   \n \n \n                      (1,330) \n \n \n                        (1,667) \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Net increase in cash and cash equivalents \n \n \n   \n \n \n                     28,000 \n \n \n                       21,696 \n \n \n \n \n Cash and cash equivalents at start of the period \n \n \n 28 \n \n \n                   112,563 \n \n \n                       90,867 \n \n \n \n \n Cash and cash equivalents at end of the period \n \n \n 28 \n \n \n                   140,563 \n \n \n                     112,563 \n \n \n \n \n \n \n Notes to the Financial Statements \n   \n 1. Basis of preparation \n   \n 1.1  General information \n   \n The consolidated financial statements of Distribution Finance Capital Holdings plc (the \"Company\" or \"DFCH plc\") include the assets, liabilities, and results of its wholly owned subsidiaries, DF Capital Bank Limited (the \"Bank\"), DF Capital Financial Solutions Limited and DF Capital Retail Finance Limited, which together form the \"Group\". \n   \n DFCH plc is registered and incorporated in England and Wales whose company registration number is 11911574. The registered office is Express Building, 9 Great Ancoats Street, Manchester, England, M4 5AD. The Company's ordinary shares are listed on the Alternative Investment Market (\"AIM\") of the London Stock Exchange. \n   \n The principal activity of the Company is that of an investment holding company. The principal activity of the Group is as a specialist commercial lending and savings banking group. The Group provides niche working capital funding solutions to distributors and manufacturers, enabled by competitively priced savings products. \n                 \n These financial statements are presented in pounds sterling, which is the currency of the primary economic environment in which the Group operates, and are rounded to the nearest thousand pounds, unless stated otherwise. \n   \n 1.2 Basis of preparation \n   \n The Group consolidated financial statements and the Company financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards (\"IFRSs\") as adopted by the United Kingdom (UK) and interpretations issued by the IFRS Interpretations Committee (IFRS IC). \n   \n The consolidated and Company financial statements are prepared on a going concern basis and under the historical cost convention except for the treatment of certain financial instruments, including the revaluation of investment securities held at fair value through other comprehensive income (FVTOCI), and derivative contracts and other financial assets or liabilities held at fair value through profit or loss (FVTPL). \n   \n By including the Company financial statements, here together with the Group consolidated financial statements, the Company is taking advantage of the exemption in Section 408 of the Companies Act 2006 not to present its individual income statement and related notes that form a part of these approved financial statements. \n   \n For the year ended 31 December 2025, subsidiary undertakings DF Capital Financial Solutions Limited (Company number: 14891201) and DF Capital Retail Finance Limited (Company number: 15788832) were exempt from the requirements of the Companies Act 2006 relating to the audit of individual accounts by virtue of section 479A of the Companies Act 2006. The Company, as the ultimate parent company, is providing a guarantee for DF Capital Financial Solutions Limited and DF Capital Retail Finance Limited in accordance with section 479C of the Companies Act 2006 as at 31 December 2025. \n   \n 1.3 Basis of consolidation \n   \n The Group financial statements include the results of the Company and its subsidiary undertakings. Subsidiaries are fully consolidated from the date on which control is transferred to the Group and are deconsolidated from the date that control ceases. Accounting policies of the Company and its subsidiaries are consistent. The Group 'controls' an entity if it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. \n   \n Upon consolidation, all intra-group transactions, balances, income, and expenses are eliminated within the consolidated financial statements within this Annual Report and Financial Statements. The consolidated financial statements contained in this Annual Report consolidate the statements of total comprehensive income, statements of financial position, cash flow statements, statements of changes in equity and related notes for Distribution Finance Capital Holdings plc, DF Capital Bank Limited, DF Capital Financial Solutions Limited and DF Capital Retail Finance Limited, which together form the \"Group\", which have been prepared in accordance with applicable IFRS accounting standards. Accounting policies have been applied consistently throughout the Group and its subsidiaries. \n   \n The Group's Employee Benefit Trust (EBT) is controlled and recognised by the Company using the look-through approach, i.e. as if the EBT is included within the accounts of the Company. \n   \n 1.4 Adoption of new and revised standards and interpretations \n   \n International financial reporting standards issued and adopted for the first time in the year ended 31 December 2025 \n In the preparation of these financial statements no accounting standards are being applied for the first time. \n   \n International financial reporting standards issued but not yet effective which are applicable to the Group \n In April 2024 the IASB issued IFRS 18 - \"Presentation and Disclosure in Financial Statements\".  This is expected to impact the way in which information is disclosed in financial statements without impacting materially on the underlying accounting. \n   \n IFRS 18 is expected to apply to the Group with effect from the financial year ending 31 December 2027, if the standard is endorsed for use in the UK. A detailed exercise to determine the impact of the new standard on the Group's annual reporting will be carried out before the implementation date. \n   \n In May 2024, the IASB issued \"Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7)\". \n   \n These amendments are effective for annual reporting periods beginning on or after 1 January 2026. An exercise has been performed which concluded that the amendments to the standard will have no impact on the Group's annual reporting. \n   \n Other than the above, there are no new reporting standards and interpretations in issue but not effective which address matter relevant to the Group's accounting and reporting. \n   \n 1.5 Principal accounting policies \n   \n The principal accounting policies adopted in the preparation of this financial information are set out below. These policies have been applied consistently to all the financial periods presented. \n   \n 1.6 Going concern \n   \n The financial statements are prepared on a going concern basis as the Directors are satisfied that the Group has adequate resources to continue operating for a period of at least 12 months from the date of approval of the financial statements.  In making this assessment the Directors have considered: \n   \n \n \n \n \n § \n \n \n The Group's financial projections and current trading performance together with the Group's capital and liquidity resources and surpluses over regulatory and risk appetite requirements; \n \n \n \n \n § \n \n \n Further consideration has been given to the external factors facing the business including the macro-economic environment, geopolitical risks and the regulatory environment, and whether there are any material uncertainties that could impact the Group's ability to operate as a going concern; \n \n \n \n \n § \n \n \n The stress testing and capital and liquidity planning performed as a part of the ICAAP and ILAAP demonstrate that the Group has adequate capital and liquidity buffers and has the ability to effectively manage stresses and resources; \n \n \n \n \n § \n \n \n A number of severe and plausible scenarios were considered as part of the stress testing process with a combination of severe idiosyncratic and macroeconomic scenarios. The scenarios included a demand side shock driven by geopolitical tensions and rising overseas import tariffs impacting economic growth; \n \n \n \n \n § \n \n \n Consideration was given to banking sector failures in recent years and whether there are any implications for the Group. This included assessment of our deposit base, which is made up predominantly of retail customers, of which 97.7% are fully covered by the Financial Services Compensation Scheme ('FSCS'). Further consideration was given to the liquid assets of the Group which is predominantly cash held at the Bank of England, alongside the Group's asset and liability maturity profile; \n \n \n \n \n § \n \n \n In respect of climate change, the Board recognises the long-term risks and these are considered as part of the annual ICAAP. \n \n \n \n \n   \n Based on this review, the Directors believe that the Group is well placed to manage its business risks successfully within the expected economic outlook. Accordingly, the Directors have adopted the going concern basis in preparing the financial statements. \n   \n Information on the Group's business strategy, performance and outlook are detailed in the Chair's Statement, Chief Executive Officer's review and Chief Financial Officer's review. The Risk Overview sections further detail the key risks faced by the Group and mitigants and provides an overview of the Group's Risk Management Framework. \n   \n   \n 1.7 Critical accounting estimates and judgements \n   \n In accordance with IFRS, the Directors of the Group are required to make judgements, estimates and assumptions in certain subjective areas whilst preparing these financial statements. The application of these accounting policies may impact the reported amounts of assets, liabilities, income and expenses and actual results may differ from these estimates. \n   \n Any estimates and underlying assumptions used within the statutory financial statements are reviewed on an ongoing basis, with revisions recognised in the period in which they are adjusted, and any future periods affected. \n   \n Further details can be found in note 3 on the critical accounting estimates and judgements used within these financial statements. \n   \n 1.8 Foreign currency translation \n   \n The financial statements are expressed in Pound Sterling, which is the functional and presentational currency of the Group. \n   \n Transactions in foreign currencies are translated to the Group's functional currency at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the foreign exchange rate ruling at that date. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Foreign exchange differences arising on translation are recognised in the statem...

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